The Digest:
President Bola Tinubu has signed an executive order stripping the Nigerian National Petroleum Company (NNPC) Limited of powers to deduct oil revenues before remittance to the Federation Account Allocation Committee (FAAC). The order, gazetted February 13, 2026, directs that all oil and gas revenues, including Royalty Oil, Tax Oil, Profit Oil, and Profit Gas, be paid directly to the Federation Account. Key changes include: NNPC loses 30% management fee on profit oil/gas from production sharing contracts; the 30% frontier exploration fund must now be transferred to the Federation Account; gas flare penalty payments previously directed to the Midstream and Downstream Gas Infrastructure Fund will now go to FAAC. Presidential spokesman Bayo Onanuga said the PIA 2021 framework had created "unjustified multiple layers of deductions" diverting over two-thirds of potential remittances. The reforms aim to restore constitutional revenue entitlements of federal, state, and local governments.
Key Points:
- The executive order significantly increases revenues available to federal, state, and local governments.
- It eliminates estimated annual leakages of billions in deductions and management fees.
- Citizens gain potential for improved public services, while NNPC faces reduced revenue control.
- This signals a major fiscal reform reversing PIA 2021 provisions.
- The timing, with immediate effect, boosts FAAC allocations.
Sources: TheCable, Presidency/Bayo Onanuga
